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Own Damage v/s Third Party Cover Under Bike Insurance

In India, an individual primarily prefers a two-wheeler as a mode of transportation as the traffic and dense crowd on the Indian roads is a huge problem. Therefore, to ensure it, two-wheeler insurance offers a range of benefits and conveniences in both types of bike insurance policy i.e. own-damage cover and third-party cover. Read on this article to get a detailed comparison between own-damage v/s third-party cover under bike insurance.

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Significance of Bike Insurance

Buying the right insurance plan that fulfills all your needs within a budget is a crucial decision for a bike owner. Hence, you must be careful about the coverage in your insurance policy. It acts as a safety cover against any financial loss and legal liabilities in case of mishaps such as a road accident.

So, it is always a wise decision to consider factors like- IDV, model of a bike, engine capacity, age of the bike, and geographical area for buying any type of bike insurance. It is recommended to search, compare, and study various available options on the internet and choose a plan accordingly.

Benefits of Own-damage Bike Insurance

An own-damage cover in bike insurance protects your own vehicle against any losses or damages caused due to a mishap. The Insurance Regulatory and Development Authority of India (IRDAI) permitted to buy this policy in September 2019 for all the bike owners from different insurers according to their specifications.

All the new bike owners are no more bound to buy a long-term insurance policy, instead, they can have a standalone own-damage plan of 1 year. This plan covers the insured bike but must be renewed annually. Also, the policyholders can enhance their own-damage policy by opting for add-on cover under it.

Benefits of Third-party Bike Insurance

In India, according to Motor Vehicle Insurance 1988, third-party bike insurance is mandatory. It gives you financial protection for the loss or damages caused to your own vehicle, as well as third-party in the road accidents.

Suppose you are involved in a bike accident and injured yourself and also a third party. Now you might end up spending a hefty amount on the treatment both. But with the help of third-party bike insurance, all the medical expenses are covered. It also gives compensation up to Rs 7.5 lakhs in case of damage to the third party. Thus, this cover offers you protection if the third party is not insured.

Difference between Own-damage and Third-party Bike Insurance

Below is a detailed comparison chart showing all the features & benefits of own-damage cover and third-party cover-

Point of Basis Own-damage Cover Third-party Cover
Definition The own-damage cover is a type of bike insurance plan, providing financial coverage for the damaged bike of the policyholder. It is not compulsory, however, it offers greater protection than just third-party insurance. According to the Motor Vehicle Act of 1988, it is mandatory to have a third-party bike insurance policy for any bike owner. Under this, it gives coverage for third-party liabilities including injuries, death, and property damage.
Coverage
Under this plan, only own damages are covered.

 

 Only third-party liabilities are covered under this plan.
Add-ons You can buy add-ons with an own-damage cover. With third-party bike insurance, you cannot upgrade your basic policy with add-on covers.
Personal Accident Cover It does not give you a personal accident cover. Under third-party bike insurance, a personal accident cover of Rs 15 lakh is given to the bike owner.
Premium Price The premium price increases with time. It has usually low premium than the own-damage cover.
Depreciation Rate The insurance premium is affected by the depreciation rate. ]The premium does not get affected by the depreciation rate.

Factors You Should Consider Before Buying Bike Insurance Policy 

  • Buying & Claiming Process:One of the major factors you should look at before purchasing a bike insurance policy is the buying & claiming process. You must search for different insurers on the internet and then decide which one has a hassle-free online buying & claim settlement process.
  • Complimentary Services:Always choose an insurance provider that stands out from its competitors by offering you unique service benefits along with the policy. Look for their complimentary services as an added benefit and decide accordingly.
  • Claim Settlement Speed & Ratio: A claim settlement ratio of any insurance company will give you an idea about how smooth & successful their claim process will be. Therefore, check the claim settlement ratio of different insurers before buying any type of bike insurance policy.
  • Insured Declared Value: IDV is the maximum amount given by an insurance company in a case when your bike is a total loss or stolen. In the case of the total loss, a higher IDV means a higher reimbursement amount. Usually, low premiums are attractive, but they will not give you maximum financial benefits. So, it is advisable to check your IDV as well, not just the premium amount. 
  • 24x7 Customer Support: A well-reputed insurance company is equally well-known for providing unparalleled 24x7 customer support. Therefore, ensure that your bike insurer is always available for you whenever you need them. 

Conclusion

To choose the best kind of bike insurance for your two-wheeler, we have shared a comparison chart featuring all the benefits and limitations of both own-damage cover and third-party bike insurance for you. Therefore, evaluate your choices and make an informed decision of buying a bike insurance policy according to your requirements and budget.

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

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^The renewal of insurance policy is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. Actual time for a transaction may vary subject to additional data requirements and operational processes.

^The buying of Insurance policy is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. Actual time for transaction may vary subject to additional data requirements and operational processes.

#Savings are based on the comparison between highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB.

*TP price for less than 75 CC two-wheelers. All savings are provided by insurers as per IRDAI-approved insurance plan. Standard T&C apply.

*Rs 538/- per annum is the price for third party motor insurance for two wheelers of not more than 75cc (non-commercial and non-electric)

#Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB.

*₹ 1.5 is the Comprehensive premium for a 2015 TVS XL Super 70cc, MH02(Mumbai) RTO with an IDV of ₹5,895 and NCB at 50%.

*Rs 457/- per annum (1.3/day) is the price for the third-party motor insurance for private electric two-wheelers of not more than 3KW (non-commercial). Premium is payable on an annual basis